Demonstrators from across Italy filled the streets of Rome last Saturday to protest against labour market reforms and austerity policies of Prime Minister Matteo Renzi

More than a million people flooded into the streets of Rome on Saturday to protest against the neoliberal labour market “reforms” being pushed through by Matteo Renzi’s government.

At the same time much of the leadership of the governing Democratic Party (currently in coalition with the tiny new Centre Right, a split from Berlusconi’s party) were at a Blair style love-in with big business in Florence known as La Leopolda (after the old railway station, now converted into a conference venue, in which it is happens).

Most of the PD’s leaders, but not all. A significant minority were on the streets in Rome as they aligned themselves with the CGIL union confederation (the largest and most left wing of the big three confederations, and traditionally linked to the Democratic Party, as it was its predecessor organisations, the PDS and the PCI before it).

The split was open and obvious and as the day went on, ever more bitter as a war of words was fought out through the media between the partisans on each side.

It is a split that can only deepen if, as seems likely, CGIL presses ahead with the struggle struggle against the Jobs Act, with more action including a possible general strike.

‘Jobs Act’: an assault on workers, and Italian

The demonstration had been called by CGIL in response to the so-called “Jobs Act” (it is known by this English name, mainly due to Renzi’s adolescent obsession with seeming cool by peppering everything with English). This law seeks to reverse rights won by workers four decades ago.

In particular it will make it easier to sack people currently protected by Article 18 of the Workers’ Charter (Statuto dei Lavoratori) of 1970. The article makes it difficult to make workers redundant in enterprises employing more than fifteen people (though this has already been reduced by reforms under Martio Monti’s government).

Reform of the labour market and a battle over Article 18 probably wasn’t what Renzi had planned to do this Autumn,  the traditional season for labour militancy, but he has now chosen to take up the battle.

It could have been his Clause 4 moment, in which he defeats the old guard of the PD clearing the way for its transformation into a thoroughly neoliberal party, the voice of the left and union militants silenced.

As such it is a high risk strategy, for if the unions take up the challenge, as they are promising to, the battle will be fought out not in conferences and committee rooms, but on the streets and in the workplaces.

His would not be the first government in Italy to fall at the first hurdle. Workers resistance has seen off other assaults on the Workers’ Charter.

He has however in large part been forced into this battle by the negative reaction from Europe to the constitutional changes also being pushed through. But when the EU ganged up with the European Central Bank and the markets to oust Berlusconi, demanding reform, it wasn’t really tinkering with the constitution, no matter how flawed it is, that they had in mind.

A breaking of union power and the sweeping away of the gains of the Hot Autumn was what they wanted, and which none of the country’s governments of the last twenty years have been able to bring about. The Workers’ Charter is the most symbolic centre piece of these gains.

The passage of the Jobs Act at the start of October through the Senate was torrid, with Five Star (M5S) throwing coins at the seats of the government Senators, and there being general uproar.

Renzi had to make it an issue of confidence in his government to dampen opposition in his party’s ranks and get it through. Many of the law’s provisions are vague, being left to the government to work out in the future (a particular point of anger for the M5S), but he managed to get it through 165 votes to 111.

The Streets against Renzi

It was in opposition to the “Jobs Act” and the rightward course of the government that CGIL called the demonstration in Rome.

Despite its huge size it was not as large as some previous union backed demonstrations, but then this was due to the failure of the other union federations, CSIL and UIL (previously linked, respectively to the now defunct Christian Democratic and Socialist parties), to take action. If CGIL pushes ahead they may well be forced to join.

The slogans from the platform and the street were in particular aimed at Renzi, widely seen as a cuckoo in the nest of the left.

The key note speech of the day was made by Susanna Camusso, the most left wing leader CGIL has had for a while, and who barely disguises her hatred for Renzi whom she has compared to Thatcher.

She called for increased taxes on the rich and investment in public services. She said that this was the start of a struggle which would not be short and would continue – including if necessary a general strike.

Previous CGIL opposition to the PD driven policies has has been restrained by the leadership of that party, something which may now lessen given its divisions.

La Leopolda: Renzi and his courtiers

At the same time as the unions were marching though Rome, in Florence the fifth annual event know as “La Leopolda” was taking place.

A cross between a conference and an awards ceremony it was what is often known grandiloquently as a “summit” in English.

Inspired by Steven Jobs’ Messianic annual appearance in Cupertino (an Apple laptop open in front of Renzi, just in case you didn’t get it) this love-in between the Blairite wing of the PD and big business is primarily a media event. The workings are meant to be “open table discussions” but how any actual work can be done in such a media throng is open to question.

The cast of players in this pageant is the same sort of people who populated the court of Blair: figures in high finance, big business, the media and show business.

A more refined crowd than the Berlusconi’s hangers on (a motley collection of show girls, prostitutes, drug dealers and pimps) they are also more dangerous to the workers of Italy. These people are a significant cross-section of the ruling class.

First held in 2009 by Renzi and his co-thinkers, the so-called rottamotori (“demolishers”), a coterie of up-and-coming politicians of the PD, it is not a party event but one organized outside the democratic structures of the party, by a Foundation linked to Renzi and financed by big business.

Most prominent among these, and star of the show whenever he appears, is Davide Serra, a hedge fund manager, and long time backer of Renzi.

He made one of his visitations this weekend to announce that he would join the PD, and had applied tellingly, for membership to its London branch. This is of course, where he actually lives, and has done since the mid-nineties when he started working for UBS. The start of a career in high finance (or gambling as it might also be called) he next joined Morgan Stanley and then established his own hedge fund in 2005.

He followed up his adherence to the party under its new leaders by saying that he would be willing to finance the party as well.

Serra also took the opportunity to say that he thought Renzi’s labour reforms should be more “aggressive” and that the right to strike by public sector employees should be restricted.

Serra has financed Renzi, and his Foundation for a number of years. Funding previous Leopolda events he became a figure of public controversy when the leader of the PD’s old guard, Pier Luigi Bersani attacked Renzi for his backing by “the Cayman” (a type of crocodile) in the party primaries.

Renzi lost the primaries to Bersani who became the PD’s candidate for Prime Minister for the 2013 general election.

Serra then switched his support to Mario Monti, the neoliberal technocrat drafted in to become an unelected Prime Minister following the markets’ ousting of Silvio Berlusconi.

Despite his lack of an electoral mandate Monti brought in austerity, swinging cuts and labour market reforms.

The voters had their revenge though: Monti and his liberal electoral alliance, Civic Choice bombed in the general election

Monti’s failure was the failure of radical neoliberalism to find any real support in Italian society. Given Berlusconi’s notoriety, and failure to achieve anything in government, the likes of Serra turned to the Democrats.

The only viable vehicle for a thorough neoliberal restructuring of society is now the PD. It has to be transformed in the same way as Blair transformed the Labour Party.

This is the mission of Renzi and his fellow “demolishers”.

And so Davide Serra, hedge fund owner and émigré, who believes in cutting public spending, pensions and workers rights is joining a party the core of which is still the old Italian Communist Party, the largest Communist party in the Western world.

Blair may have got away with such a hijack in the late 1990s, but in the age of austerity such worship of wealth and “success” may not go down so well with 12% unemployment and plummeting living standards.

The Democrats divide

A substantial minority of the PD leadership chose not to attend Renzi’s court in Florence and instead joined the march in Rome.

The usual suspects of the non-PD left were there: Bertinotti, Vendola, Ferrando, as were the trade union leaders such as Landini, the head of FIOM and Sergio Cofferati, former head of CGIL.

They were joined by much more mainstream figures such as Gianni Cuperlo, who came second in the PD leadership race, and Pietro Fassino.

This is not the first time that the PD has divided like this, the referendum of 2003 on workers’ rights caused similar divisions, but that was when Berlusconi was in power.

That so many of the party’s leading figures snubbed Renzi and joined the union opposition to the Jobs Act is a sure sign of trouble.

That the split was not just your usual PD factionalism is seen from the more unexpected faces.

Among them was “Pippo” (Giuseppe) Civati, the young and good looking deputy from Lombardy who had been a leading rottamotore and one of the founders of  Leopolda in 2009.

He came third in the party leadership race but seems to have been moving steadily to the left since then.

Some of the sternest criticism of the day though directed at the Renziani came from Rosy Bindi, clashing on television with Debora Serracchiani, President of the region of Friuli and a Renziani DOC. That the split is not as business as usual is shown by Bindi’s presence in the awkward squad.

She is no ex-communist revanchist. A former leader of Azione Cattolica and the Christian Democratic party, she found her way into the PD via the Populari (one of the DC successor parties) and the Margherita (Daisy) coalition of Christain Democrats and Liberals, the same route as Renzi.

Bindi struck out at Renzi calling La Leopolda ”embarrassing” stating that she was strongly opposed to the way that an unofficial meeting of some of the party leadership was happening, financed by business, and inevitably influencing government policy. She added that if it was possible to meet with Davide Serra but not workers representatives, then Leopolda was “the first demonstration of the post-PD” adding that the Renziani had a “another project”.

The leaders of the party have good reason to fear Renzi.

It was recently revealed that the party’s membership is in free-fall dropping from 500,000 to just 100,000 in little more than a year. As an organised force it is disappearing from whole parts of the country. Even where it remains inactivity and passivity is the order of the day.

For Renzi this is not a problem. He crows endlessly about the 40% the party got in the Euro elections in May. His vision of the party is that of La Leopolda, media driven, centred on personalities and financed by big business. The model is the US parties. As Pippo Civati has commented La Lepolda, of which he was an instigator, can be mistaken for a Republican convention.

For the former activists of “The Firm” (as the old Communist Party’s leaders sometimes called it, strangely echoing the British Royal Family) which within living memory had a million members and in some parts of the country, an office in every district, see Renzi as destroying the thing they have devoted their entire lives to.

They also see in the Renzi project an entirely different one from the reformist traditions of the Party. The strongest Blairite medicine, but without the sugar of public spending increases.

They also see the party as heading towards oblivion. Renzi’s current popularity cannot last. A downturn in the party’s electoral fortunes could lead the party to crash and burn as the Christian Democrats did following the scandals of the early nineties, the Rifondazione did after joining the Prodi government, or more recently as did Pasok in Greece.

Berlusconi’s return

In order to outflank Beppe Grillo’s Five Star Movement (M5S) Renzi revived the political career of Silvio Berlusconi negotiating with him personally.

At a meeting at the PD headquarters in Via Nazareno in January he did a deal, the contents of which have never been revealed.

In theory the “Pact of Nazareno” was ostensibly about constitutional reform, repealing the current electoral law (the so-called Porcellum, or Pig Law), which led to parliamentary gridlock following the general election and replacing it with one known as the Italicum, changing the composition of the Senate.

It is suspected that their pact contained more.

Certainly it has had the effect of carving out M5S and sidelining Angelino Alfano’s party New Centre Right, made up of the “traitors” who broke away from Berlusconi, and the PD’s actual coalition partner in government.

There has also been a strange convergence between Renzi and Berlusconi on other issues as both try to seize the liberal moral high ground. This week Berlusconi adoped a softer line on ius soli (the right of the children of immigrants to become Italian citizens at present denied to them until they reach the age of 18). He also accepted civil unions for lesbians and gays (but not marriage) which was a leap considering his previous attitudes towards homosexuality.

His decision to stand again for his revived Forza Italia party may be hubris, and his FI may be bumping along on 15% but he has proved himself indestructible, so many scandals has he been through.

Both Grillo and Berlusconi, though their parties are languishing on 20% and 15% respectively, could expect to benefit from an end to Renzi’s honeymoon period.

Uncertainty to the Democrats’ left

To the PD’s left another possible winner is Nicchi Vendola’s Left Ecology Freedom party (SEL).

The party was founded in 2009 when the right of the PRC (Party of Communist Refoundation better known as Rifondazione Comunista) which wanted to continue an alliance with the Democrats, broke away from the new leadership which wanted a return to the movements after their debacle in government.

The PRC had lost all its seats on parliament in 2009 and it and SEL went into the 2013 general election as part of different alliances. SEL joined with the PD and as a result of being part of the Italia Bene Comune coalition won 37 seats despite only getting 3.2% of the vote. The PRC formed the Civil Revolution alliance with the greens and anti-corruption campaigners and and took 2.25% but won no deputies.

Following the post election gridlock and the PD’s decision to form a government with Alfano’s New Centre Right, SEL quit their alliance with the PD (but kept their MPs!).

The party then seemed to move to the left fighting this year’s Euro elections in alliance with the PRC as the Another Europe With Tsipras list. People on the left started to talk about the Tsipras list as the possible start of an Italian Syriza.

However the results for SEL were disappointing as despite three MEPs being elected none were from SEL.

The divide in SEL between those who wanted to ally themselves with the PD, and those who would deal with their former comrades in the PRC remains.

The divisions within the PD and the growing possibility that the party will break apart are likely to reawaken dreams of an alliance with PD freed of the Renziani usurpers, thus healing the breach created by the split of the old PCI into PRC and PDS in 1991.

Even if the PD remains united, not unlikely given the serial failure of the party’s left to reject neoliberalism, the right of SEL are likely to be transfixed by the PD’s internal ructions, hoping that may lead to yet another realignment of the centre-left.

Slump deepening

All this of course takes place against a background of an economy that is smaller now than in 2000, let alone in 2008, and where people barely remember what economic growth is. Unemployment stands at 12% (probably an underestimate) and youth unemployment at 44% (probably an overestimate).

The austerity policies embraced by the political establishment from Bersani rightwards seem destined to make what is already a grossly unequal society more unequal. It also threatens to destroy what there is of a welfare state, developed later than in Northern Europe and never as extensive. Sucking yet more demand out of an economy already running on empty could be disastrous.

Italy of all European countries is the one said to be most at risk of deflation.

If Italy, the third largest economy in the Euro zone, goes into a deflationary spiral of constantly declining wages, prices and demand the effects on the rest of the continent could be profound.

Italy has known many political crises before, but the present imbroglio, in the conditions of a deepening slump, make almost any outcome possible. It is urgent that a principled and dynamic left emerges, one that is capable of relating to the widespread sense of disaffection.